The aim of this study was to produce sugarcane plantlets from cell suspension culture and study its genetic fidelity using molecular markers. The study was carried out using sugarcane varieties Co 86032 and Q117. Callus cultures of both the varieties were optimized using six different callus induction media. After screening the growth response of callus on six different callus induction media, it was observed that medium no. VI supplemented with 500 mg l−1 of each PVP, Casein hydrolysate and MES buffer showed high amounts of callus in Co 86032 (79.66 ± 0.44%) and Q117 (82.83 ± 1.69%). Addition of PEG 8000 at 2.5% to this medium had a profound impact on inducing somatic embryogenesis in Co 86032 (54.66 ± 1.76%) and Q117 (66.66 ± 2.60%) as compare to control (24.33 ± 1.76%) and (27.33 ± 2.73%), respectively. Cell suspension cultures were established by culturing embryogenic calli in liquid medium showed well established suspension cultures with fever cell aggregates. There was negligible cell division during initial 2 days of incubation and cell count increased rapidly between 2 and 8 days. Further incubation beyond 8 days resulted in a decrease in cell viability. Enhanced callus proliferation in Q117 while enhanced shoot regeneration in Co 86032 was observed from cell suspension culture. The clonal fidelity of in vitro regenerated plants was assessed by using RAPD and ISSR markers. Analysis of the ten RAPD markers indicated that 90.48 and 86.95% true-to-type regenerated plantlets in Co 86032 and Q117, respectively. However, in the ISSR markers, Co 86032 did not show any polymorphism and in the Q117, 92.18% true-to-type plantlets were found. These results confirmed that somaclonal variation occurs during the process of indirect organogenesis and RAPD and ISSR marker based molecular analysis is a suitable method for an early detection of variation in sugarcane.Electronic supplementary materialThe online version of this article (doi:10.1007/s13205-016-0579-3) contains supplementary material, which is available to authorized users.